BrightSpire Capital (NYSE:BRSP) versus CTO Realty Growth (NYSE:CTO) Critical Review

BrightSpire Capital (NYSE:BRSP) and CTO Realty Growth (NYSE:CTO) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

This table compares BrightSpire Capital and CTO Realty Growth’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BrightSpire Capital	-69.35%	9.44%	2.79%
CTO Realty Growth	17.10%	4.04%	1.92%

Volatility and Risk

BrightSpire Capital has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500. Comparatively, CTO Realty Growth has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Valuation and Earnings

This table compares BrightSpire Capital and CTO Realty Growth”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BrightSpire Capital	$364.80 million	2.07	-$15.55 million	($1.02)	-5.72
CTO Realty Growth	$118.66 million	4.90	$5.53 million	$0.59	32.88

CTO Realty Growth has lower revenue, but higher earnings than BrightSpire Capital. BrightSpire Capital is trading at a lower price-to-earnings ratio than CTO Realty Growth, indicating that it is currently the more affordable of the two stocks.

Dividends

BrightSpire Capital pays an annual dividend of $0.64 per share and has a dividend yield of 11.0%. CTO Realty Growth pays an annual dividend of $1.52 per share and has a dividend yield of 7.8%. BrightSpire Capital pays out -62.7% of its earnings in the form of a dividend. CTO Realty Growth pays out 257.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BrightSpire Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

56.6% of BrightSpire Capital shares are held by institutional investors. Comparatively, 67.2% of CTO Realty Growth shares are held by institutional investors. 1.9% of BrightSpire Capital shares are held by insiders. Comparatively, 5.3% of CTO Realty Growth shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for BrightSpire Capital and CTO Realty Growth, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BrightSpire Capital	1	3	1	0	2.00
CTO Realty Growth	0	0	2	2	3.50

BrightSpire Capital presently has a consensus target price of $7.00, suggesting a potential upside of 20.07%. CTO Realty Growth has a consensus target price of $21.00, suggesting a potential upside of 8.25%. Given BrightSpire Capital’s higher possible upside, equities research analysts plainly believe BrightSpire Capital is more favorable than CTO Realty Growth.

Summary

CTO Realty Growth beats BrightSpire Capital on 10 of the 17 factors compared between the two stocks.

About BrightSpire Capital

BrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States and Europe. The company operates through Senior and Mezzanine Loans and Preferred Equity; Net Leased and Other Real Estate; and Corporate and Other segments. It focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments consisting of first mortgage loans, senior loans, debt securities, mezzanine loans, and preferred equity investments, as well as net leased properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.

About CTO Realty Growth

CTO Realty Growth, Inc. is a publicly traded real estate investment trust that owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust, Inc. (NYSE: PINE), a publicly traded net lease REIT.